How Can I Budget If My Pay Is Always Different?

This post may contain affiliate links, from which I may earn revenue to support this free site. All opinions are my own, and I only promote products that I use and love!

You’ve just opened your bank app to check your pay deposit, and it’s a different amount – again! How are you supposed to plan when you can’t predict how much your paycheck is going to be?

Everyone knows that it is easier to put your money in the right places if you have a plan. Most of those plans (usually called a budget) revolve around knowing how much income you will have, and calculating your savings and spending around that income. But what do you do if your income changes every month?

Military families often have this situation. Maybe the servicemember is moving in and out of a tax-exempt combat zone, or receiving Family Separation Allowance because of a long training, or you receive a Cost of Living Allowance that varies based upon the local currency exchange rate. Any way it happens, it can make you crazy if you don’t have a plan to deal with it.

Note: this plan is NOT for people who have huge fluctuations in pay, like commissioned salesmen or seasonal workers. It’s for those whose pay might go up or down within a range of a few hundred dollars.

After many years of experiments, I think I have finally hit on an arrangement that solves this problem. Instead of trying to budget every cent of an income that changes every month, I picked a nice, even number that is just a bit lower than the lowest pay my husband ever receives, and I build my spending plan around that number. Any pay that exceeds that amount gets swept off and put towards debt payment or savings.

Let’s say that Sailor Steve usually brings home between $2100 and $2200 every paycheck . Steve could build a budget around a $2000 paycheck. When his pay is deposited, he goes in and does a transfer of the amount that exceeds $2000. That extra money can go to debt repayment or savings.

On the off chance that my husband has a paycheck that is less than the budgeted amount, I have two choices: either fit that pay period’s spending to the lower amount, or tap into our savings to make up the difference. Either choice is fine, as long as the savings can be repaid quickly.

Please note that this bonus money is not the only debt repayment or savings in a good budget. This is extra, on top of your regular debt payments or savings plans.

For me, this is much easier than trying to adjust our budget to meet my husband’s changing income. I have a consistent figure with which to plan, and our savings account gets a little extra boost with each paycheck.

Do you have a trick for dealing with inconsistent paychecks? Please share, so we all can learn.

Do you want to know more about your military pay and benefits?

Things change fast around here! Keep up-to-date with email alerts about the topics that are important to you!

Success! Now check your email to confirm your subscription.

There was an error submitting your subscription. Please try again.

First Name

Email Address

We use this field to detect spam bots. If you fill this in, you will be marked as a spammer.

Comments

Great advice. I am a big fan of tracking your expenses and understanding the minimum cash flow needed to sustain the household. Even if your pay is fairly even, big recurring purchases can have the same effect as a volatile paycheck. For example, heating oil in the winter can be a few hundred dollar expense, and its tough to guess the exact amount due to differences in the price of oil and how cold it gets. But, if i know i need oil every 2 months, we can plan on spending or saving less on those months to cover the entire expense. This ability all comes from the knowledge of what your monthly expenses are and the discipline to keep within those spending limits!

Subscribe

Search

Featured On

Affiliate Disclosure

This site does contain advertising and affiliate links. If you click on an advertisement or link, I may be compensated. I only promote companies that I love and trust.
Kings High Media/KateHorrell.com is a participant in the Amazon Services LLC Associates Program, an affiliate advertising program designed to provide a means for sites to earn advertising fees by advertising and linking to Amazon.com

Disclaimer

Kate does not represent the Department of Defense, the Department of Veterans Affairs, or any government agency. This blog is strictly for informational and entertainment purposes only. The content on this site should not be considered professional financial or legal advice. I may receive compensation through affiliate or advertising relationships from products mentioned on this site. All reviews on this site represent the personal opinions of the author. All references to third party products, rates, and offers may change without notice.